Obama hopes to adopt a cap-and-trade system similar to Europe’s Emissions Trading Scheme. The government will decide how many tons of CO2 can safely be emitted, and then auction off permits to emitters of these greenhouse gases. Expected proceeds [tax increases on all consumers] over ten years: $645 billion.

Polluters [C02 is not a polutant] who can cut their emissions at low cost will be able to do just that, and sell their permits to companies that find it cheaper to buy permits than to clean up their production processes. Not a bad idea — in theory. But here’s the rub — or more precisely, rubs. [Read more…]